In line with the current demand for all types of rural properties and land, smallholdings for sale are highly sought after by those seeking a country lifestyle; an added incentive is that they can offer self-sufficient living.
This article explains:
- What a smallholding is
- The appeal of a smallholding
- The types of buyers that they attract
- Opportunities from ownership
- What to think about when looking for smallholdings for sale
Dive in to discover more about living the rural dream!
What is a smallholding?
The definition of a smallholding is indistinct – while they are widely regarded as being a productive farm of less than 50 acres, the Collins dictionary defines a smallholding as a piece of land used for farming which is smaller than a normal farm.
A smallholding is a residential site that has more land than a garden area but is not a commercial farm. Often, the land is used for a mixture of crop growing, livestock and woodland along with grassland; essentially, a small mixed farm.
The appeal of a smallholding for sale
The Covid-19 effect and the rise in working from home has made the notion of selling a house in the town or city and buying a potentially bigger property in a rural area an attractive reality. Buyers realise that they can get better value by searching further away from urban areas, and the uptake in interest for country houses, farms, equestrian smallholdings and grazing land of all descriptions offers an opportunity for many remote farmers to capitalise on the current market.
Traditional smallholding buyers are now up against greater competition from a range of purchasers and rising land values in some areas is inevitably pushing up the price of rural smallholdings for sale. According to estate agents, a major factor in many sales is the condition of the house, while rural properties with far reaching views generate a lot of interest as do all types of equestrian properties.
The average value of farmland in England and Wales reached £7,000 an acre for the first time since 2019 according to Knight Frank’s Farmland Index, Q2 2021, and predictions are that prices will continue to rise.
Growing interest
Richard Saunders, Managing Director of Land Rich, said he has seen an increased demand for rural properties from developers and independent buyers. He commented:
During the pandemic, we have seen a large proportion of people wanting to move away from towns and cities to have the flexibility of working from home and have a better work-life balance.
This is backed up by analysis carried out by Rightmove in the summer of 2020. The data showed that enquiries for rural properties from urban residents has risen by 126% in June and July versus the previous year, with city dwellers in Liverpool, Edinburgh, Birmingham and London topping the list of those dreaming of a country-style life. However, smallholding ownership is a lifestyle choice rather than a viable business proposition.
Due to smallholdings not being a hugely attractive revenue stream and the regulations involved in making them viable, farmers struggled to keep the farms or pass them through the generations. This has forced older generation farmers to look at exit plans for land which may sit outside the settlement boundary, but has the possibility of being promoted through the Local Plan, giving the opportunity for landowners and developers/promoters to team up.
Mr Saunders added that Land Rich has disposed of some paddocks with no immediate development opportunity, but developers were willing to pay a 20%-30% uplift on agricultural value and had an overage for the landowner arranged for when planning is one day achieved.
With more focus on biodiversity net gain, this type of arrangement for land within smallholdings for sale and similar properties will become ever more popular, he added.
Country houses offer the rural dream
The market for country houses, equestrian smallholdings and similar rural properties with a small area of land is strong, affirmed Joe Martin, head of Strutt & Parker’s Ludlow office, adding:
There is a strong demand for properties with a parcel of land, smallholdings, and those that have the potential to create one. This sentiment has largely been driven by the pandemic, and the heightened desire held by many to live out the country idyll.
Property with land gives an opportunity to create this, while also providing control and a protected view. In Shropshire and Herefordshire in particular, many buyers venturing here are searching for something with enough land to keep chickens, sheep and pigs, coupled with the desire to live more self-sufficiently.
A smallholding very much ties into the idea of sustainable living, something which has been bolstered by the environmental movement, increased eco-consciousness and interest in British farming. In the West Midlands, rural properties can be more ‘off-grid’ than in less remote parts of the country, with private bore holes and spring water supplies, homes with wind turbines and room for PV panels. These go hand-in-hand with vegetable gardens and rearing your own livestock.
Starting a smallholding can be hard work, but small farmers and smallholders are more than willing to give advice and insight into how to get set up, from sheep breeds to fencing materials. There are communities and forums you can tap into, and a real desire to help your neighbours sits at the heart of countryside living.
Coronavirus has meant that a younger demographic are entering into this sort of lifestyle as many have the ability to adopt more flexible working patterns.
Demand in this part of the market remains strong and shows little let up, albeit dogged by a lack of supply of such rural properties. Herefordshire and Shropshire are very much emerging markets, highlighted over the past year or so by the increased time many have spent in the countryside and those who have travelled through lesser-known counties.
Most buyers here are entering from outside the area and, if they’re looking for somewhere with land, will find property in this area which benefits from a couple of acres.
Types of buyers for smallholdings
Whilst interest still exists from traditional purchasers wishing to make a living from the land, a growing number of non-agricultural buyers have emerged who may be keen to explore additional income streams from environmental assets such as natural capital.
Entrepreneurs may be attracted by Class Q permitted development rights which present opportunities for converting farm buildings such as a stone barn or similar properties into dwellings subject to conditions; this may enable further income options to make a smallholding viable. Another class of buyer simply seeks similar properties for space and privacy in a rural setting.
Other buyers may be on the lookout for an equestrian smallholding with enough land and stabling to cater for one or two horses or ponies, or similar properties which may have potential as a livery business.
Opportunities presented by owning a smallholding
Purchasers need to establish their aims and decide whether the holding is to be a commercial enterprise or simply provide subsistence living.
Farming
If the aim is to grow crops or vegetables, the soil quality is vital; it should preferably be well-drained with a water supply. If keeping livestock is envisaged, good quality grazing land that is fenced and offers shelter and a water supply will be required.
For those wanting a rural location but lacking the knowledge or desire to carry out the necessary agricultural work, contract farming agreements with a nearby farmer could provide a solution: the farmer undertakes operations such as sowing and harvesting on a profit-share basis.
The current interest in locally produced food presents smallholders with an opportunity and an organic approach may be viable depending on the local market. Rearing rare breeds can prove an eco-friendly option if the right breed is selected to suit the holding: hardy native breeds can be ideal, requiring minimal husbandry and capable of living outside all year.
If the access is suitable, sales from the holding may be possible. Proximity to farmers’ markets, other types of markets and tourist hubs is relevant and sales to niche caterers and restaurants may also be advantageous. Mail order and online sales may have potential; thorough market research is advisable to assess the customer base.
Biodiversity Net Gain
Landowners may be able to benefit from new planning rules that are set to become mandatory in England from January 2024.
A new biodiversity net gain (BNG) requirement means that developers must be able to demonstrate a 10% improvement in biodiversity following their development. This requirement has been put in place because the government is committed to achieving a net improvement in biodiversity following development work in the future.
The reason that BNG can benefit landowners is that many developers will not be able to achieve a net gain in biodiversity on the development site itself. In this case, they can buy biodiversity units from a third party such as farmers or other land owners.
A landowner could register their land for use with BNG through a recognised broker and put an agreement in place with a developer.
Commercial options
Alternative income streams can result from the decision to rent out sections of land for grazing or creating tourism ventures such as campsites or holiday accommodation; location can be key here and it is important to identify any gap in the local market for an opportunity.
Unused buildings could potentially be converted, or it could be a worthwhile option to rent them out for a variety of tourism or business uses, such as local craft enterprises, subject to planning consent.
Equestrian properties may offer commercial options; depending on local demand, livery stables could prove viable if stables and paddocks are available. There is always the option of buying a going concern with a business and customer base already in place.
Points to Remember
- A smallholding must be registered to apply for government subsidy or grants.
- A smallholding must have a County Parish Holding (CPH) number if the agricultural activity involves keeping livestock. CPH numbers can be obtained from the Rural Payments Agency.
What is your view on smallholdings for sale?
If you have recently bought a smallholding, equestrian smallholding or are hoping to buy one, we could love to hear about your experience; please let us know.
If you are considering buying a rural property, various protected species surveys may be required depending on its future use, and it’s advisable to seek advice from professional land managers.
References
CPRE. 2019. Reviving county farms. [Online]. Available here. (Accessed 19th August 2021)
Farmers Weekly. 2021. 7 things we know about the 2021 farmland market. [Online]. Available here. (Accessed 19th August 2021)
The Scottish Farmer. 2020. Lockdown drives demand for rural property. [Online]. Available here. (Accessed 19th August 2021)
Ecological Land Cooperative. 2010. Small is successful. [Online]. Available here. (Accessed 19th August 2021)
Primelocation.com. 2014. Owning a smallholding is big business for those after the good life. [Online]. Available here. (Accessed 19th August 2021)
Start up donut. 2021. How to start up a smallholding. [Online]. Available here. (Accessed 19th August 2021)
Who owns England? 2018. How the extent of county farms has halved in 40 years. [Online]. Available here. (Accessed 19th August 2021)
Addland. 2021. The most recently listed smallholdings for sale. [Online]. Available here. (Accessed 1st September 2021)
